UAE Federal Government fully-owned Emirates Development Bank (EDB) and Ras Al Khaimah-based National Bank of Ras Al Khaimah (RAKBANK) have signed a Memorandum of Understanding (MoU) on credit guarantee and co-lending programs for small and medium-sized enterprises (SMEs) in the region.
Under the deal, RAKBANK will be able to provide up to $2.7 million (AED10 million) financing to SMEs, and 50 percent of the facility amount will be either guaranteed or co-lent by EDB.
The program also intends to assist UAE individuals in their startup journeys by providing finance of up to $272,258 (AED1 million), with EDB guaranteeing or co-lending 60 percent of the amount. The MoU is part of EDB’s commitment to advancing the National Agenda’s aims of empowering the country’s industrial sector and propelling a sustainable national economy by increasing the UAE’s SME ecosystem and SMEs’ contribution to the country’s GDP.
“At EDB, we aim to support companies and entrepreneurs to have access to wider financing options, which will serve the country’s efforts of building a knowledge-based economy and contribute to sustainable economic development. Our MoU with RAKBANK will help in bridging the funding gap for SMEs in key sectors, which will not only strengthen the SME ecosystem but also pave the way for building a robust economy.”
The MoU is in line with EDB’s recently announced strategy, which includes direct and indirect lending (Supply Chain, Project and Long-Term Finance), an investment arm for startups and SMEs (accelerator, equity finance, business growth fund), and business advisory services for entrepreneurs, startups, and small companies (coaching, consulting, mentoring, market research).
Mr. Peter England, CEO at RAKBANK said, “This agreement is in line with the Bank’s commitment to advance and strengthen the SME’s presence in the country by offering them ‘Simply Better’ financial support and convenient banking solutions that best suit their needs.”
“The development of the National economy is a top priority at RAKBANK and this partnership exemplifies that by supporting priority sectors in the country such as manufacturing, healthcare, infrastructure, food security, and advanced technology, all while targeting a wider customer base by offering facilities to UAE nationals and ex-pats alike,” Mr. England added.
Related: Khalifa Fund unveils ‘Abu Dhabi SME Hub’ to help entrepreneurs in UAE